Comprehensive Analysis of Toyota Motors' Supply Chain and Operations

This report provides a detailed analysis of Toyota Motors' supply chain management and operations. It begins with an introduction to systems and operations management, emphasizing its importance in decision-making within an organization, particularly in the context of automotive manufacturing. The report focuses on Toyota Motors, a global leader in the automotive industry, and examines its approach to materials management, including lean and agile practices like Just-in-Time and Kanban. It then delves into the structure of Toyota's supply chain, covering inbound and outbound logistics, the role of intermediaries, and the attainment of competitive advantage through various strategies. The report also explores the relationships between material management, logistics, and reverse logistics, along with Toyota's use of contractual agreements and outsourcing. Finally, it discusses the role of emerging technologies and information technology in managing the supply chain, covering materials planning and systems development. The report concludes with an overview of the key findings and references supporting the analysis.

SYSTEMS AND OPERATIONS

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
Approach to materials management lean and agile practices ....................................................3
Structure of supply chain and approach to intermediaries..........................................................5
Competitive advantage through various practices......................................................................6
TASK 2............................................................................................................................................6
Relationship between material management, logistics and reverse logistics..............................6
Contractual agreements and outsourcing....................................................................................8
TASK 3............................................................................................................................................9
Role of emerging technologies in supply chain..........................................................................9
Information technology, materials planning and systems development for managing supply
chain..........................................................................................................................................10
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
The systems and operations management is a plan that is effectively focused on
developing various skills in order to assist critical thinking, problem-solving, communication
along with continuously changing technologies in an organisation. There are a number of
decisions taken by managers in an organisation regarding manufacturing process, services as
well as marketing which requires knowledge of it. Operations management includes all the tasks
which begins from getting raw materials for production, acquiring tools, hiring a team for
production and training them as well
(Ren, 2020)(Panigrahi, and Jena, 2020)(Nunes, Causer and Ciolkosz, 2020). The following
report is conducted on Toyota Motors, which is a automotive manufacturer with headquarters in
Toyota, Aichi, Japan. It is a Japanese multinational company which id tenth largest company
throughout world by revenue. Toyota motors is well known for quality and operations
management throughout the world. There are a number of theories and tools that have been
developed by Toyota Motors and are now used by a number of huge organisations throughout
the world. The following report focuses on management of supply chain within the organisation.
In order to manage supply chain a close check upon raw materials acquisition, movement of
work in progress and storage of finished goods is to be focused upon by an organisation. There
are a number of different practices used by management to attain competitive advantage in
market. Various ways in which Toyota Motors manages logistics, reverse logistics, outsourcing
of operations and different contractual activities are also discussed. The following report also
explains technologies affecting an organisations approaches to supporting supply chain.
TASK 1
Approach to materials management lean and agile practices
Managing materials in organisation is a critical takes which require deep level of expertise,
skills and awareness about all activities of firm. In relevance with Toyota, manager of company
uses different approaches for managing materials which are described below-
Just in Time- It is strategy which is adopted by entity with aim of aligning or arranging
all the raw materials from vendors, production schedules etc. It is most crucial approach w3hich
is being used by chosen entity because it assist in increasing efficiency by elimination of waste

materials (Evtodieva and et. al, 2020). Through this only those goods are being ordered & used
which are actually needed.
Kanban- It is defined as scheduling system in which consideration is being focused on
what, when and how much is to be produced is examined. It is an effective tool through which
JIT is achieved in most appropriate manner.
Review of Toyota's supply chain structure
The above picture depicts the supply chain structure of organisation. IT has been seen
that it is a systematic process which is needed to be carried out under proper consideration so
that every activity is processed properly. Main players in this structure are distributors,
customers, assembly plant and warehouse. Without supply chain, it is not possible to achieve
results. Also, they assist management to be aware about inventory, production system so that
existed resources are used accordingly.
Customers- They are one who consume, purchase the product as well as service of
enterprise. Also, entity is able to generate profit and sales revenue from them. Without
customers, it is not possible to generate revenue.

Distributors- These are vendors who are responsible for supplying of product to end
users. With there market connection they provide better service to entity in their production and
delivering process.
Assembly plant- These are to be known as manufacturers who assemble all raw
materials into final product for use. Without them, it is not possible to use raw materials for
achieving objectives.
Lean as well as agile practices are beneficial practices for every corporation because
they assist in increasing productivity, reducing of waste material, etc (Mollenkopf, Ozanne, and
Stolze, 2020). Whereas agile practice is technique which help in solutions to a specific problem,
development within the enterprise. By adopting both practices, competitive advantage is easily
gained by organisation. With these two, it is easy for continuous improvement & delivery for
value stream.
Therefore, the stated paragraph specifies that managing materials assist company to use
their resources in most efficient manner. Through this, it is easier to accomplish goals &
objectives. Further, with given practices decision making process is undertaken in most correct
way.
Structure of supply chain and approach to intermediaries
The supply chain management of Toyota Motors can be divided into two parts that are
inbound as well as outbound logistics. In inbound logistics company have two different tasks to
complete. The first one is when the goods are transported from local suppliers to local plant and
second is a global inbound logistics in which the materials from japan move to European and
North American plants. In order to easily carry out the logistics services Toyota Motors uses
third party logistics. All the suppliers of company are well managed based on their locations.
After this the route that will be used to manage the logistics is planned effectively. Company
uses electronic data in order to keep records of the amount and quantity that will be loaded,
unloaded at the plant of company. It is necessary to keep pipeline data by organisation as it helps
at time of shortage of shipment, delay in transportation and so on. Other part of supply chain is
the outbound logistics in company (Chen, Wang, and Huang, 2020). This is when the product is
distributed amongst intermediaries and consumers.

Toyota motors sells its vehicles through its dealers. There are a number of intermediaries
that are helping company to make their produced goods available to their customers in market.
Intermediaries are an influential part of distribution chain for an organisation as they are helping
an organisation in making revenues. Before choosing an intermediary for the organisation it
becomes essential for Toyota Motors to effectively study the financial position of intermediary.
It is necessary to understand weather various resources are present with intermediary or not in
order to carry out the workings for Toyota. In order to effectively manage the intermediaries in
organisation Toyota Motors is taking various measures that include advertising to them via trade
publications, trade shoes as well as direct advertising. It is also necessary by Toyota Motors to
make sure that the are effectively evaluating their intermediaries. In order to manage the
intermediaries it is required by them to affectively measure average stock, targets achieved,
customers feedback, timelines of delivery as well as credibility in market.
Competitive advantage through various practices
Toyota motors have successfully become market leader using a number of different
techniques which help it to affectively manage the inventory and supply chain in organisation.
These theories have provided benefits to organisations and they are now gaining competitive
advantages in market with the help of these theories. Just in time is used by Toyota Motors in
order to successfully decide on the production quantity in organisation. This helps in setting up
quality of products along with eliminating wastes and inconsistencies and also setting a
production line for company. It helps company in saving their cost by reducing the inventories
carrying cost. It provides advantages to companies in facing competition in market as well. The
company is also effectively using Pull System Manufacturing. In this system company is not
manufacturing units until and unless they are demanded by the customers. This is tightly linked
with supply chain management of organisation as it sets up the need for inbound and outbound
logistics in the organisation.
TASK 2
Relationship between material management, logistics and reverse logistics
Material management refers to a function within supply chain management. Material
management can basically be termed as the capacity of an organisation to plan the requirement
of material in an organisation. Material requirement in organisation are however related to

procurement as well as different functions of sourcing (Obeng-Ahenkora and Danso, 2020).
Material management in Toyota motors is done using a number of tools of quality management
which were initially developed in the organisation.
Logistics refers to a detailed orientation of various operations within an organisation.
When describing generally logistics can be called as the flow of things which are raw materials,
work in progress or finished goods from one point to other. It is a necessary part of organisation
in which the goods flow from supplier to manufacturer and then to end consumer. Logistics for
Toyota motors depend upon material requirement and orders as they do not believe in keeping
ready stock and produce only on orders.
On the other hand, reverse logistics reverse logistics refers to steps that are specifically
taken for reuse of various products as well as materials. In normal terms logistics brings products
from producer to end user however reverse logistics is used in case when the product is required
to be taken at least one step back or behind the actual line. Examples can be where goods move
from the end consumers to the intermediaries and then to manufacturer. Toyota motors have
already succeeded in Reverse logistics as well as once it had to call back 680000 cars due to
some issues in United States. There were two different recalls which were taken care of by
Toyota in year 2005 and 2009. they are affectively using their experiences in lift trucks, retrieval
systems and different material handling equipments which is enabling them to optimize the
overall flow of reverse logistics in organisation.
Material management, logistics and reverse logistics in an organisation are related.
Along with it there are a number of approaches that are used by Toyota motors to manage these
three which are also interrelated. For instance company uses Pull strategy in which the
production of product is done only on orders (Sarkar, Omair and Kim, 2020). There is no ready
stock kept in market. Due to this effects on material management and logistics can be seen as the
requirement of material starts the logistics also starts in organisation.
Along with this there are a number of other approaches used by Toyota motors such as Just in
Time. This is used by organisation to determine time at which the movement of raw materials
will start in organisation. While justifying this the organisations can also start the time for
logistics. On the other hand when talking about reverse logistics them the approaches used to
manage logistics can be efficiently used to manage reverse logistics as well. It is often seen that
Toyota uses the same path for reverse logistics that have already been used while getting goods

to consumers. The trucks and cargo which are used by Toyota for reverse logistics also remain
same. In this way company effectively maintaining material management, logistics and reverse
logistics within the organisation.
Contractual agreements and outsourcing
Contractual agreements basically refers to an agreement between two parties in which
each or party is responsible for making, buying or selling the goods as well as services. These
contracts can also be sometimes called as binding agreements. Toyota motors came into a
contract with DENSO to consolidate their core electronic component operations of both the
companies into DENSO itself. Earlier these functions were partly managed by Toyota and partly
by DENSO. This will improve efficiency of Toyota leading to high level of expertise in order to
effectively develop competitive advantage in market (Xu and et. al., 2020). This would also
result in higher mobility and helping Toyota group to effectively manage the competition in
market. This is also affecting supply chain management in organisation as company needs to
rearrange their production functions. Supply chain is directly related to production function as
movement in production function will also lead to enhance the inbound logistics and raw
material procurement in organisation.
Toyota motors have entered into contract with Infosys limited as well. This is regarding the fall
in sales of Toyota motors in the European market. Infosys however have also went in a number
of contracts of outsourcing with other auto mobile companies one of them being BMW. For
Toyota motors Infosys will be providing management services through applications which will
help the company to manage its functioning throughout European market. It is necessary to
manage the information technology as a number of services and fnctions in European market of
Toyota Motors is only managed through these applications. This is a great effort on par of
Toyota as it is also helping in reducing cost to company along with bringing satisfaction for
consumers. They are also effectively helping to reduce the efforts put towards supply chain
management. When handling customer queries and problems effectively the chances of reverse
logistics in an organisations are brought down. This is reducing the burden on supply chain
management.
The financial services used by Toyota motors corporation is also shifting towards Tata
consultancy services. This deal with TCS is effectively helping company to reduce the
maintenance job in company (Wong and et. al., 2020). When the maintenance cost saved by use

of this outsourcing is 50% and it is used effectively by Toyota motors they can spend the amount
towards their supply chain management to effectively make use of supply chain management.
Other than the IT and financial sectors there are also a number of other works that are outsourced
by Toyota Motors. They are using third party logistics which means they are outsourcing the
logistics functions of organisation to some other company. This have a great effect on supply
chain management function of company as company do not have to set up their own logistics
functions. They can easily calculate which company can effectively carry out their logistics at
best prices meeting all the requirements of organisation.
Therefore, it can be determined that outsourcing and contractual agreements are used by
organisation to optimize their function and make best use of resources available to them. There
are a number of functions in an industry which are affecting businesses in one or other way. In
order to make sure that company is using best way out of each function and after calculating
opportunity cost and value companies are effectively outsourcing some of its functions to save
costs and provide better quality to its consumers.
TASK 3
Role of emerging technologies in supply chain
Supply chain in every industry are facing increased pressure due to dynamic customers
demand, shifting expectations of consumers as well as need for increased service levels. There
are a number of different emerging techniques that are incorporate din supply chain these days to
meet customers requirements. Block chain, various machine learnings and artificial intelligence,
robots, drones, big data & predictive analytics, cloud-based technologies are a number of
development that are brought in organisations that result in enhancing supply chain management
in a umber of companies.
However there are a number of criteria in supply chain management but the basics in it
will always remain same that are making sure that goods are reaching to customers quickly and
ethically. It is also required to increase customers expectations by increase in these practices. It is
necessary that organisations are regularly gaining visibilities, making predictions and tracing
various products when they are moving in inbound or outbound logistics. It is also necessary to
integrate with the intelligence technologies.

Toyota motors is effectively using it in order to gain various benefits. There are a
number of others along with Toyota who are experimenting with different combinations of old
and new technologies incorporating them in supply chain. The supply chain used by company is
effectively enabling company to set up itself as a pioneer in supply chain management. Toyota is
effectively using leading edge technology at each stage to make sure that they are the supply
chain is enhanced and worked towards at each step (Asamoah and et. al 2020). Toyota is making
effective use of Internet of Things (IOT) which is expanding and the analytics of company is
becoming more predictive and automated. There are a number of sensors presents which are
helping in effectively providing the corners before any unexpected activity is taking place during
the supply chain management. This will also automatically trigger the adjustments while flow of
materials is taking place. There are also technologies like 3D printing which is a great advantage
for company in terms of transformation which is required in manufacturing processes. This will
allow to reduce as well as even eliminate shipping of these goods throughout the world in some
conditions. It is often seen that there are a number of small parts that are required to be replaces.
Due to the manufacturing unit being at a distance from consumer a lot of time , efforts and cost is
involved in such supply chain. This technology can effectively reduce the need for such
expenses.
There are also development of a number of robots which are helping organisations to
manage the time which is being used to manufacture certain products. Toyota is generously
investing more than $9 billion in order to advance their production automation used in
organisation. They are taking help from a number of information technology companies to help
them and build effectively automation in production processes. Drones are also a great way to
induce such practices in organisations. In the production unit these can be used to transfer small
goods from one place to other. Doing this it can effectively save time of human resource of
organisation. In the following ways development in information technology is effectively helping
Toyota Motors and a number of other companies to improve their supply chain management.
Information technology, materials planning and systems development for managing supply chain
Technological advancements is complete transforming the daily business activities and
process in supply chain management of Toyota. There is a pace that has been set up to ensure

higher transparency. There is cost savings as third part logistic providers & supply chain
mangers are using wireless technologies. There is improvement in accuracy and use of
automated systems.
RFID technology is used for automatic identification & data capturing. It leads to
reduction in labour cost and streamlining of data capturing so that there can be reduction of
errors in manual process. Smartphone technology has lead to vendors and shoppers to with daily
work to match job with right devices. There is better communication because of mobile
technologies. There is more investment on integration of technologies by adoption of automatic
vehicle location systems.
Government requirement are tackled along with use of updated technologies. Toyota uses
Driver Assisted Truck platooning (DATP) can help in reducing the strain of driver shortage by
helping more drivers to be part of parade. There is use of autonomous vehicles interstate between
southern California and EI paso since year 2017. Toyota has adopted internet of things &
vehicle to everything that is a technology connecting one vehicle with other vehicles that is
helping in supply chain safety as there is monitoring of drivers health, assistance with lane
changes and there is passing information between entity and vehicle.
Material planning is termed as a systematic and scientific way of analysing the need of
raw material and other items required for production within the investment policies. In addition
to this, it is determine a sub system of the planning activity that help in proper implementation of
operations. With the help of an effective material planning, an organisation is able to process its
supply chain in an effective way that has positive influence on the overall performance of an
organisation (Esper, 2020). In relation to Toyota, its operations managers determine the
requirement of raw material by using this method which as positive impact on the supply chain
of the organisation.
Systems development is basically a procedure of testing, defining as well as
implementing a program and application in an appropriate manner. It consist of development of
database system and creation of customized system that help in making database in a proper
manner. It is analysed that system development is associated with the supply chain as it help in
managing al the processes associated with it. In addition to this, system development is used to
facilitate the sharing data in the supply chain.

CONCLUSION
The above report clearly describes importance of supply chain, materials management,
systems and operation in a business. It is required by every organisation to make effective
practices and adopt various tools with the help of which they can deliver the required quality of
product and services in given time period. It is necessary for a manager to understand that
inbound logistics, work in progress and outbound logistics are all related to supply chain
management. Other than this a new process have been introduced these days which is called as
reverse logistics. All these sub parts of supply chain management are somehow interrelated and
changes in any one of them is leading to bring in changes in other parts as well. There are a
number of offers available to organisation such as outsourcing their work or creating contractual
agreements with them which will help in reducing the burden of supply chain management.
There are a number of development taking place in information technology which are helping
supply chain management. The automation of supply chain management is enabling
organisations to enhance their other operations as well as effectively fulfilling all the
requirements of the consumers.

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